OPEC: Dangote refinery fuel supplies’ll disrupt Europe’s oil industry

The Organisation of Petroleum Exporting Countries (OPEC) says supplies from Dangote Refinery and Petrochemicals in Lagos State will put pressure on the performance of Europe’s oil industry, especially the Northwest Europe (NWE) Gasoil.

OPEC in its newly released monthly Oil Market Report for June 2024 listed Dangote refinery among the top diesel and jet fuel suppliers that will disrupt Europe’s oil and gas Industry, a development experts forecasted will positively impact the Nigerian economy.

It would be recalled that Standard and Poor Global quoting trading and the ship tracking sources had earlier predicted that Nigeria’s $20 billion Dangote refinery would shake up international crude flows when it reaches full capacity, having already made an impact since coming online in January, trading sources and ship tracking data show.

The OPEC report revealed that “upside potential for higher production levels from Nigeria’s Dangote refinery, coupled with strong flows from the Middle East and new supplies from the Mexican Olmeca refinery, will likely exert pressure on NWE gasoil performance in the mid-term.”

“Europe is one of the world’s largest purchasers of refined petroleum products and relied on imports from Asia and the U.S. after the European Union banned the use of Russian diesel in the bloc,” it added.

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However, the 650,000bpd capacity refinery owned by Africa’s richest man, Aliko Dangote, is eyeing the wider European market after International Oil Companies stopped supplying its crude oil.

The Vice President of Oil and Gas at Dangote Industries Limited, Devakumar Edwin, announced the company had earlier exported its first jet fuel cargo to Europe as it rapidly scales production.

The refinery was said to have exported 90 per cent of its 3.5 billion litres of jet fuel and diesel to Europe over an alleged lack of support from the Nigerian government.

“It is good to note that from the start of production, more than 3.5 billion litres, which represents 90 per cent of our production, have been exported,” Edwin was quoted as saying in a statement made available to The Star on Thursday, August 8, 2024.

OPEC further stated: “In June, the jet/kerosene crack spread in Rotterdam against Brent showed a slight decline, influenced by supply-side dynamics.

“Despite signs of improving air travel activities, subdued jet fuel demand from the aviation sector weighed on the product market.

“Going forward, European jet/kerosene demand is expected to see upward pressure as consumption levels from the aviation sector continue to pick up in the coming months.”

Also speaking, Aliko Dangote said the facility would broaden its feedstock sources with Libyan, Angolan, and Brazilian crude.

“The refinery was built to use Nigerian crude and add value to it within Nigeria. Why should we deviate from that focus?” the President of Dangote Group said.

Dangote added that the crude supply issues were “getting resolved”, saying the refinery remained open to all opportunities “to supplement it”.

The Star